Tracking terrorism trends: a new model for political risk?

Like other volatile risks, such as hurricanes and earthquakes, potential terrorist threats are being modelled and quantified by a small number of specialist catastrophe modelling firms, brokers and insurers.

Earlier this year, Towers Watson became the latest firm to develop a terrorism and political risk model.

The new model, called Sunstone, covers some 44 different attacks and 42 types of target around the world, including 702,000 individual locations in the US alone. These include high explosive attacks, chemical, biological, radiological and nuclear (CBRN), and more unusual threats such as cyber or an electromagnetic pulse. It also covers kinetic attacks such as the failed plot by Islamic terrorists earlier this year to derail a train in Canada.

“We wanted to be forward-looking,” says Holt. “There is little discussion about cyber terrorism or the potential for attacks on GPS systems, but we need to look beyond the type of incidents already prevalent now.”